commerce essay

Early Writings On Management Commerce Essay

Published: 23, March 2015

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The word manage is derived from the Italian word maneggiare which literally means to handle especially a horse. The English word management evolved from the French word mesnagement (management) in the 17th and 18th centuries. The basic objective of management is handling people or a situation for achievement of certain goals. As a noun the word management refers to the persons who perform the acts of management. But, from a functional or implementation perspective, management is a process that involves planning, organising, resourcing, directing, and controlling different activities for the accomplishment of desired goals. Management is also approached as a mechanism of creative problem solving. The creative problem solving is accomplished through four functions of management: planning, organising, leading and controlling.

In the early twentieth century, mary parker Follett defined management in simple words as the art of getting things done through people. According to koontz and weihrich, management is the process of designing and maintaining an environment in which individuals, working together in groups, effectively accomplish selected aims.

Evolution of management: The first known management ideas were recorded in 5000 BC when Sumerian traders developed written records for the government and commercial use the application of management also evident in the Egyptian civilization as early as 4000-3000 BC. The pyramids of Egypt built with millions of stone blocks by utilizing the services of the people are the testimonials of a coordinated effort on an extremely large scale. Creation of such huge structures would have certainly required extensive planning, decision-making. Organising men and materials and supervision. A study of the development of management theory is indispensable to the study of management as a discipline. In relation to other disciplines, management is relatively new, though generalization on military strategy, military logistics, motivation, compensation, roles, money-making, occupational specialization, and superior-subordinate relations have been in existence since ancient times. These generalizations were about organizing and making effective organizational activities.

Since early times, people have had a notion of a value of division of labour, specialization, and mass production. In China and Rome, Imperial governments operated vast territories through bureaucratic setups that occurred in second century BC. These territories were probably ruled according to the concepts of specialization and division of labour. Chinese philosopher Menicus (third century BC) discussed division of labour and Greek philosopher Plato (fourth century BC) observed that specialization can increase productivity. At the height of its power, the Roman army standardized its fighting techniques. Archaeological remains testify to the use of mass production techniques for glass blowing and pottery-making as early as 500 BC. To truly understand current management thought, it is necessary to examine work of management pioneers, as also the contextual and environment factors that formed the basis of their theories.

Management is the development of people and not the direction of thingsâ€¦Management is personnel administration.-LAWRENCE A. APPLEY

Early writings on management:

Sun Tzu's The Art of War: this book on military strategy was written by Chinese general tzu in the 6th century BC. But the writings in the book can very well be used for managerial purposes. The recommends that success can be achieved by being aware of utilizing the organization's strength and utilizing them to exploit the weakness of the rival or enemy. It emphasises the importance of discipline in order to get the things done through a coordinated group effort.

Chanakya's Arthashastra: this treatise, developed around third century BC, deals with the governance of kingdom by a king or a leader. It lays down the principles that should be taken into consideration by a leader while making policies of governance and people management. It highlights the importance of creation of departments, development of detailed job profiles and qualifications of administrators who had to manage these departments as directors. Arthashastra considerably affected the administrative philosophy of different rulers of india for centuries.

Machiavelli's The Prince: this book was written by niccolo Machiavelli in 1513 as a counsel for the leadership of Florence, Italy. Machiavelli recommended in this classic that the ends justify the means and that a leader should use fear, not hatred, to maintain control.

Effect of the industrial revolution on management

The industrial revolution made a significant contribution to the development of management thought before the 20th century. The substitution of human power with machine power made it possible to manufacture goods in large numbers in factories more economically. Consequently, there emerged large scale businesses which required managerial skills to produce goods in an efficient and profitable manner.

18th century management literature:

The wealth of nations by Adam smith: from the conceptualisation perspective the greatest contribution to management thought occurred during and after the 18th century. Renowned economist Adam smith in his management classic, The Wealth of the Nations (1776) described the economic advantages that can be derived from the division of labour that is break down of jobs specialistion can be credited to the economic advantages propounded by Adam smith.

Innovators like Eli Whitney (1765-1825) ,James Watt (1736-1819) and Matthew Boulton (1728-1809) developed elements of technical production such as standardisation quality control procedures, cost -accounting ,interchangeability of parts and work planning. These works led to the creation of literature on technical aspects of management that could guide the practising managers to perform their roles in an efficient and effective manner. All this led to the strengthening of the industrial revolution.

19th century management literature

The modern management discipline evolved as an offshoot of economics in the 19th century. Classical economists such as john Stuart mill (1806-1873) took forward the work of Adam Smith and provided a theoretical background to resource allocation production and pricing issues in the 19th century. By late 19th century economists such as Leon Walras (1834-1910)Alfred marshall (1842-1924) and others succeeded in providing a comprehensive theoretical background for further development of management literature in the 20th century.

Robert Owen (1771-1858) made the first social experiment in managing others by instituting performance enhancing interventions like performance evaluation system, incentive based pay system safer working conditions and helping workers to acquire housing for themselves. In 1881, Joseph Wharton took the profession of management one step ahead by becoming the management scholar to offer a tertiary level course in management.

20th century management literature

The first textbook on management was written by j.duncan in 1911. The discipline of management got a strong foundation when Harvard university become one of the first American universities to offer a graduate degree in business in 1908. Scholars like Ordway Tead (1891-1973), Walter Scott and J. Mooney applied the principles of psychology to management in the second quarter of the 20th century. Around world war II, H. Dodge, Ronald fisher and Thornton c. fry introduced mathematical and statistical techniques into management studies to give the discipline of management a more quantitative and scientific basis rather than basis of assumptions that is the rule of thumb basics. Patrick blackett combined the statistical theories with microeconomic theories in the 1940s, and laid the foundation of operations research in the management science to optimally solve management problems in the areas of logistics and operations.

Management literature in its present from is both a reflection of and a reaction of and a reaction to different management theories and approaches developed over a period of time. These theories and approaches have their own share of useful applications as well as limitations because no single theory or approach can capture multi-faceted discipline of management in its entirety.

DIFFERENT SCHOOLS OF MANAGEMENT THEORY

Management as a systematic body of knowledge and a distinct and identifiable discipline is the product of the twentieth century. The variety of approaches developed by various scholors have led to a kind of confusion, and resulted in, what Koonts calls a "confused and destructive" management at the shoproom level by Frederick Taylor and the reflective distillation of experience from general management point by Henri Fayol, we see these and other early beginings overgrown and entangled by a jungle of approaches and approachers to management theory ". Koontz was the first academician to have attemted to classify the various approaches into the schools of management theory. His work has been advanced by experts such ads John F. Mee, Joseph A Litterer, W.W.Cooper and others. Based on the writings of these and other scholars, we have attempted to classify management thought in six "Schools of Management Theory" .

The Classical school

The Human Relations school

The Decision Theory school

The Management Science school

The Systems Theory schools

The Contingency Theory schools

The classical school: the classical school of thought evolved in the late 1800s and early 1900s and continued into the 1920s. The classical management approach focused on a attainment of efficiency and productivity in an organisational setting. The classical school includes three theories. Two of these theories-the Scientific Management Theory and the Management Process Theory-developed separately, but at about the same time period. The Scientific Management Theory owes its origin to Frederick W.Taylor, who is regarded as the father of scientific management". He aimed at making management a science based on "well recognised clearly defined and fixed principles, instead of depending on more or less hazy ideas". Taylor's followers include Gnatt, Frank and Lillian Gilberth and Emerson. The classical theory school also has bureaucratic management. It relies on the development and implementation of guidelines for managing the work in an organisation. It helps in development of organisation structure, hierarchy of authority, rules and procedures and division of roles and responsibilities to manage work in an efficient and effective manner.

The human relation school: this school of thought emerged in the 1920s in reaction in to the limitations of the classical theories that ignored the human aspects of work in organisations. The predominant characteristics of the theories of management that originated from the human relations approach are as follows:

Employees are social beings hence could not respond purely rationally to rules, chains of authority and economics incentives.

Employees bring social needs along with them to the organisation consequently, effective management required a more human oriented approach.

Emphasis required on the social needs, drives and attitudes of individuals to motivate them to perform in accordance with their true potential.

The experiments at the Hawthorne plant of the Western Electric Company conducted by Mayo, Roethlisberger and others focused, for the first time, on the human dimensions of organizations. Classical theorists had either ignored or over-simplified the human factor. The human relationists "sought to supplement and challenge the classical theorists. This school of thought, may be termed neo-classical rather than modern because it follows the theoretical form of classical theory and emphasises the human dimension of management as a counter point against the impersonality of the classical theory."

The Decision Theory School

The decision theory school of management, led by Simon, looks upon the management process as a decision making process. In the view of the decision making, the entire field of management of various management functions involves decision making, the entire field of management can be studied from the process of decision making. They have expanded their area of theory building from the decision making process to the study of the decision, the decision maker and the social and psychological environment of the decision maker. The decision theorists start with the small area of decision making and then look at the entire field of management through this keyhole.

The management science school: this approach towards management problems emerged during world war II. It emphasises the use of quantitative techniques from the discipline of mathematics and statistics to aid managers in making optimum decisions. Although the management science approach provides the practising manager important tools for making rational decisions with respect to allocation of resources, yet all the managerial processes cannot be rationalised decisions with respect to allocations of resources. This approach is very useful in select areas of management, like inventory management, warehousing and transportation related problems, assigning of manpower or vehicles for the tasks. But this approach fails to provide solution for all facets of management, especially the areas with high level of human element, like leadership, motivation etc. managing is not a pure science and hence cannot be completely modelled for all types of situations.

The Systems Theory schools : this approach propagated in the early 1960s, believed that organisation is an open system and its components are interrelated and interdependent which are functioning as a whole. According to this approach an organised enterprise cannot exist in isolation rather it is dependent on its external environment it is part of larger systems such as the industry the economic system and the society to which it belongs. The systems theory focuses on the design of the whole system as distinct from the design of its components or subsystems. The synergistic characteristic of the systems approach believes that the total effect is greater than the sum of the effects of the parts taken independently.

The contingency theory school : in the mid-1960s the contingency view of management approach emerged. The contingency approach emphasises the development of an appropriate fit between organisational processes and the characteristics of situation because there is no one best way to handle any management problem. According to the contingency approach the behaviour of one subunit is dependent on its environment and its relationship with the other sub unit that have some control over the sequences desired by that sub unit ( Tosi and hammer, 1974).

Functions of management

Every association makes its own management skills and concepts to help their association run effortlessly and complete the vision, goals and ideas it has set forward. The function of management is dived into four different parts, taken into account to manage the strategic decisions, tactical and operational organization

The four functions of management are:

Planning

Organizing

Directing

Controlling

Planning:

Planning is the core area of all management functions. It is the foundation upon which the other three areas should be built. Planning requires management to assess the company where it is today, and where you would like to be in the future. From there an appropriate course of action to achieve the company's goals and objectives are determined and implemented.

The planning process is underway. Uncontrollable external factors that constantly affect a company, both positively and negatively. Depending on the circumstances, these external factors can cause a company, for adjusting the course of action in compliance with certain objectives. This is known as strategic planning.

when planning a strategy, analyses of external and internal factors of management may affect a company, as well as the aims and areas. From looking at these areas they control the company's strengths, weaknesses, opportunities and threats. To make it successful management has to be accurate and complete.

Organizing

Being organized is the second function of management. Management must organize all its resources to implement the plan of action is determined in the planning process. Through the process of organizing, management determined the internal organizational structure, establish and maintain relationships, and allocate resources.

In the determination of the internal structure, management must look at the different divisions or departments, staff coordination, and what is the best way to handle the necessary tasks and disbursement of information within the company. Management then divide the work that needs to be done, to determine the appropriate departments and delegating authority and responsibilities.

Organizing as a process involves many things like organizing helps in identification of activates, Classification of groups of activities, helps in assignment of duties, it helps taking responsibility and managing delegation.

Directing:

The third function is the managing director. Through the direction, management is able to influence and control the behavior of employees in achieving the goals of the company and help them achieve their own personal goals or career. This influence can be gained through motivation, communication, department dynamics, and department leadership.

Employees who are highly motivated generally above and beyond in their job performance, thereby playing a vital role in the company to achieve its objectives. For this reason, managers tend to place great emphasis on employee motivation. They come with rewards programs and incentives based on job performance and geared to the needs of the employees.

Effective communication is vital to maintain a productive work environment, building positive relationships and problem solving. Understanding the communication process and work in areas that need improvement to help managers become more effective communicators. The best way to find areas that need improvement is periodically ask themselves and others how well they are doing.

Controlling:

Control is the last of the four management functions. It is about establishing performance standards based on business objectives, and evaluate and report actual performance of work. Once management has done both, we must compare the two to determine the necessary corrective or preventive measures.

The administration should not lower standards in an effort to solve performance problems. Rather, it must directly address the employee or department that has the problem. By contrast, if limited resources or other external factors standards prohibit achieved, management should lower standards as needed. The control process, as with the other three, is ongoing. By monitoring, management can identify potential problems and take the necessary preventive measures. Management is also able to identify the problems of development that must be addressed through corrective action.

For management to be considered successful, it must meet the goals and objectives of the organization. This requires creative problem solving in each of the four functions of management. Moreover, success requires effective and efficient management. Therefore, it is necessary not only to achieve those goals and objectives, but do so in a way that the cost of implementation is feasible for the company.

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